Monday, June 27, 2011

Preferred count

Price started the week with a nice rally. In the main count this was to be expected, as wave this is a rally wave X within the wave Y of Y. Notice that i have changed the labels a little, this is to better fit the weekly count. As an alternative, i like the idea of a bearish triangle wave X. 2 more possibilities that i see are : a bigger wave c of this bearish triangle X ( like the alternative count on the chart ) and this being a bullish triangle where wave E of this triangle has finished. But the rally of the latest low is clearly corrective, so i give the highest probabilty to the main count.

Saturday, June 25, 2011

Start of the downtrend

When we look at the weekly chart using trendlines to determine the direction, we can see that the trend looks to be up still. The EW analysis says that there is a possibility that the top is allready in and the trend has reversed. If the EW analysis is correct, 1.3968 should break soon. This will mean that price has put in a lower high ( 1.4695 ) and a lower low ( below 1.3968 ). After this, price could bounce of the trendline, but this should be broken eventually aswell. A possible alternative is that price is still in wave X and price will put in a new high in a wave (Z) of X.

Friday, June 24, 2011

Slower decline or more sideways

The chances that the decline is an impulsive wave are much smaller now with the big rally, 1-2-i-ii is still possible. So i'm counting the 1.4441 - 1.4125 decline as a zigzag (5-3-5). My main count is that this zigzag is the first part of Y of (Y), price should break the trendline support and stay below it soon. The alternative count is that this zigzag is a wave B inside a triangle leg, different triangles are possible ( bullish or bearish ).

Thursday, June 23, 2011

Bears in control

Price reversed just before the ideal target zone and seems to be in a strong downtrend now. The smaller timeframe count is not very clear except for the first part, which is impulsive ( 1.4441 - 1.4385 ) meaning that the rest of the decline is impuslive aswell. While it's true that this impuslive wave could be part of a zigzag ( 5-3-5 ) aswell, price action after this initial decline looks a lot more like continuation of a bigger impulsive wave, even if the rest of the decline isn't very clear. Once the support line is broken and short after that the wave (W) low, price should test 1.3750.

Tuesday, June 21, 2011

Just a little higher

There's a possibility for a small expanded triangle inside the wave Y of X of (Y). This expanded triangle expands very high, but the fibonacci ( extentions + retracement ) targets give a nice overlapping target zone around 1.4450.

Friday, June 17, 2011

Correction before going lower

From the wave (X) top, price declined as expected and found support at the 100% fib extention. This is where the first part of (Y) has ended. This puts price in X of (Y). I'm expecting this to be small, but keep in mind that it can transform into a bigger corrective wave, like a triangle or bigger flat or complex corrective wave. After X of (Y) ends wave Y of (Y) should start taking price to around 1.3725.

Tuesday, June 14, 2011

More corrective mess

Price declined nicely out of the head and shoulder pattern. The ECB event was the trigger to that decline. The initial part of this decline seems more like a corrective wave, making the rest of the decline corrective aswell. But i have to agree that it looks like an impulsive wave if you sqeeuze your eyes a little while looking at it. Notice the shooting star candle going through the 50% retracement of the entire decline and a complex double three from the bottom where Y = 76.4% of W. A few conditions that could be enough to restart the downtrend. Then again, with a hawkish ECB vs uncertain near term greek futur, price could keep going sideways for the next couple of days/weeks.

Thursday, June 9, 2011


My focus has been on the trendline which is being tested at the moment. A nice head and shoulder pattern could be forming, indicating a top. This top would be the wave (X) i've been looking for. Perhaps the ECB event will trigger the break of the trendline and by doing so, ending the countertrend rally.

Monday, June 6, 2011

Another possibility

Since the last post, price went a little lower at first but not for long since price rallied again after making a higher low. I will now count this as a complex triple three wave (X). Another possibility is that another 3 waves up will follow, in that case there would no longer be a complex triple three, but a bigger complex double three. The 2nd X wave in the triple three, would become the X in the WXY double three. It's not called complex for nothing. If the trendline breaks chances are the downtrend has resumed.

Wednesday, June 1, 2011

The hunt for the top

The triangle count got invalidated, so it's on to the next possibility for a top. This could be at the 50% fib level. If the channel breaks price could resume the downtrend. Notice that wave Y of (X) is 161.8% of W of (X). This is unusual for a complex double three, so it is possible that wave Y of (X) is an impulsive wave C of (X), but i find it hard to count. Whatever the way you want to count it, wave (X) or alternatively, the first part of (X), looks finished.